People are looking back with rose tinted glasses, I think. This was an era where you could build rich media with absolute canvas values and it would look great and it was easy for an artist to take that canvas and do things.

The iPhone killed flash but not just in the obvious way. These days everything needs to be reactive and run on well on mobile hardware. Even if iOS supported flash it would need to be a different beast. Different screen sizes, an explosion of aspect rations, heavier security requirements, accessibility, touch controls and more led to the downfall.